Debtors collection period - formula, Finance Basics

Assignment Help:

Debtors Collection Period - Formula

Fomula is given below:

Debtors collection period = 365/ Debtors turnover

Or (365 x Average debtors)/ Annual credit sales

This refers to credit duration that was granted to the debtors on the duration within that they were imaginary to pay their dues to the firm.

The shorter the collection period/credit duration the higher the debtors turnover and vice versa. If no opening debtors are provided requires the closing debtors to represent average debtors.


Related Discussions:- Debtors collection period - formula

Importance of working capital management, Importance of Working Capital Man...

Importance of Working Capital Management The finance manager must understand the management of working capital since of the following purpose: a) Time devoted to working c

Agency theory - finance, Agency Theory The agency problem between mana...

Agency Theory The agency problem between managers and shareholders can be resolved via paying high dividends. If retention is low, managers are necessary to increase additiona

Risk structure of interest rates, risk structure of interest rates 1. Defa...

risk structure of interest rates 1. Default risk 2. Liquidity 3. Income tax consideration 4. Expectations theory

Calculate return on common equity, At the end of the fiscal year ending Jun...

At the end of the fiscal year ending June 30, 2003, Microsoft reported common equity of $64.9 billion on its balance sheet, with $49.0 billion invested in financial assets (in the

Illustrate role of credit unions in depository institutions, Illustrate the...

Illustrate the role of credit unions in depository institutions. Credit unions: Credit unions are non-profit institutions equally organised and owned through their member

Investment bank, Investment Bank A lending entity is engaged in all the...

Investment Bank A lending entity is engaged in all the phases of privacy offerings the including managing, underwriting, trading, and the distributing new security issues.

What are the factors influencing selection of investment, Investment  Attri...

Investment  Attributes/  Factors  Influencing  Selection  of  Investment In  choosing specific  investments,  investors  would require definite  ideas  regarding  features

Advantages of stock repurchase, Advantages of Stock Repurchase 1. It m...

Advantages of Stock Repurchase 1. It may be seen as a true signal since repurchase may be motivated with management belief that firm's shares are undervalued. It is true in in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd